Market Commentary & Analysis For March 14, 2020

Market last week displayed the worst performance since the crash in 1987, there were two fifteen-minute trading halts, liquidity and stimulus measures established by global central banks, and a beginning in a crude oil price war. 

The big loser was small-cap Russell 2000, which nose-dived -16.6%, next was Dow index with -10.4%, following the S&P 500 index posting -8.8%, and Nasdaq Composite index with the print of -8.2%.

The continued scope of the coronavirus spread around the globe provoked measures that are awaiting the reduction spread. The largest sporting competitions in the United States were canceled, and an embargo on most of the airline flights from the old continent took effect last Friday. 

The United States government weighed various possibilities for fiscal stimulus. However, it took the entire week to reach a provisional agreement on a package that would allow for fourteen days of paid sick allowance, additional unemployment benefits, free C-virus testing, and significant tax relief for small businesses.

N.Y. Federal Reserve convoyed emergency liquidity transactions at the end of the last week after yield spreads on long-term U.S. Treasury securities market grew significantly. The ECB (European Central Bank) raised its asset acquisitions, the BoE (Bank of England) made a crisis 50-basis points interest rate cut to 0.25%, and the PBoC (People's Bank of China) reduced the reserve provision ratio for many banks from 50 to 150 basis points.

Elsewhere, crude oil markets were enduring a dual-threat of weakened demand as well as oversupply after Saudi Arabia opened a price war with the Russian Federation notably, after Saudi Arabia reduced its crude oil price for April delivery by whopping $6 to $8 per barrel and signaled production increases for an oversupplied market following Russia's failure to consent to production cuts. The West Texas Intermediate (WTI) oil cashed by 25% on Monday's session, capitulating 23% for the week.

In the United States Treasury security market, the yield on the Ten-year note established a new all-time low closing at 0.40%, but never the less finished the last week trading action with 24 basis points higher finishing at 0.95% on the week. The Chicago Board Options Exchange (CBOE) Volatility Index, which is generally referenced a fear gauge, climbed nearly 16 points to close at 57.83: it is the highest level since the financial mayhem began a few weeks ago.